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NOTE 13 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) Since the plan is not funded by an irrevocable trust, the discount rate is equal to the 20-year municipal bond yield. G. Changes in the Total OPEB Liability Total OPEB Liability Beginning Balance $ 794,822 Changes for the year Service cost 91,803 Interest 35,055 Differences between expected and actual experience 433,178 Changes of assumptions 66,721 Benefit payments Total net changes (42,1 19) 584,638 Ending Balance $ 1,379,460 Assumption changes since the prior measurement date include the following: • The discount rate was changed from 4.05 percent to 3.77 percent. • The inflation rate was increased from 2.50 percent to 2.60 percent. • The healthcare trend rates were updated for changes in recent studies and inflationary adjustments. H. Total OPEB Liability Sensitivity to Discount and Healthcare Cost Trend Rate Changes The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate: 1% Decrease in Discount Rate OPEB discount rate 2.7 7 % Total OPEB liability Discount Rate 1% Increase in Discount Rate 3.77% 4.77% $ 1,502,004 $ 1,379,460 S 1,267,123 The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage point lower or 1 percentage point higher than the current healthcare cost trend rates: 1% Decrease in Healthcare Cost Trend Rate 6.75% grading to 3.00% Healthcare Cost Trend 1% Increase in Rate Healthcare Cost Trend Rate 7.75% grading to 4.0% 8.75% grading to 5.00% OPEB healthcare trend rate over several decades over several decades over several decades Total OPEB liability $ 1,216,895 $ 1,379,460 $ 1,571,982 92